The Twitter hashtag #BankerOutrage was launched by Radio Four yesterday summing up a very popular mood. It’s not unusual for bankers to be hated after crashes.
After the South Sea Bubble burst in 1721, there were calls in the Lords for the bankers involved to be dumped in sacks filled with serpents and dropped in the Thames. But that was the immediate
aftermath: what’s odd now is the timing. As we say in the leading article of this week’s Spectator, Hester had a bonus twice the size last year — and no one seemed to care. Now,
it’s suddenly a crisis and Fred the Shred’s knighthood is a matter of urgency. The Sunday newspapers are full of bonus-hatred, and Justine Greening has just told Sunday Politics that
she’ll vote against Railtrack directors’ bonus. Three years from the crash, and it’s eat-the-rich time. Why?
Part of the explanation is that the government is encouraging, rather than confronting, the hang-a-banker mood. ‘We dislike these guys as much as you do,’ goes the unofficial message.
‘And we’re standing up to them! Look, we’ll tax their private jets — even though it won’t bring in any revenue. We’ll strip Shred of his knighthood, after saying
nothing about it for eight years.’ And so on. Number 10 sometimes behaves as if it has hired an opinion pollster as its chief strategist, creating a feedback loop which amplifies and distorts
popular mood. That’s democracy, you might say: government doing what the people want. What else should it do?
But this is followership, and it doesn’t suit a natural leader like Cameron. He was at his best when mounting a thoughtful and heartfelt defence of capitalism the other week. It fits a
depressing pattern (which we saw with immigration): a brilliant set-piece speech, with no policy follow-through. The Big Society, for example, is now never mentioned between relaunches. Cameron
could have followed up his capitalism speech by explaining why we need the rich. He could mention that the much-maligned 1 per cent generate 28 per cent of all income tax — a figure that ought to warm the heart of the most hardened redistributionist. Especially
given that this 1 per cent earn 13 per cent of the wages paid in Britain.
The sad fact is that the UK government is very financially dependent on a very small number of people. Snarling at the rich, in this era of globalization when people and their money have never been
more mobile, is about as stupid a thing as you can do in government. No surveys are conducted but I’d bet that at least a third of Britain’s richest 1 per cent are immigrants who chose
to settle here at a time when we welcomed entrepreneurs. The Brits may stay put, but the wealth-creating Indians, Americans, Arabs and Asians? Now that Britain has the third highest rate of tax on
the planet, they may scarper.
Throughout history, societies going through recessionary traumas have turned on the moneymakers. From Idi Amin onwards, the results have seldom been edifying. The idea of taxing the rich will always be very popular, and blowing anti-banker dog whistles will always lift a party’s opinion poll rating in the short term. But in the long term, we’re all the poorer for it.
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